ANALYZING THE RELATIONSHIP BETWEEN 24 CARAT GOLD PRICE AND CONSUMER PRICE INDEX IN MYANMAR

This study examines the dynamic interplay between 24-carat gold prices and the Consumer Price Index (CPI) in Myanmar from April 2012 to July 2022, a period marked by economic volatility, currency depreciation, and political instability. While gold is conventionally regarded as an inflation hedge, its efficacy within Myanmar’s distinct economic context has remained underexplored. Utilizing monthly data from the Myanmar Central Statistical Organization (CSO), the analysis employs rigorous time series econometric techniques, including unit root testing, cointegration analysis, Vector Autoregressive (VAR) modeling, and Granger causality tests. Descriptive statistics reveal pronounced volatility in gold prices, contrasted with a more gradual increase in CPI. Unit root tests confirm that both series are non-stationary in levels but achieve stationarity upon first differencing. Granger causality results indicate that gold prices exert a predictive influence on future CPI movements, suggesting that gold functions as a leading indicator of inflationary trends in Myanmar. These findings provide valuable insights for policymakers and investors seeking to understand inflation dynamics in the country’s volatile economic environment.